VOX POPULI

by

S Kamat

as

Aam Admi

Issue: 190         Date:  27.02.2017

skamatblog.blogspot.com or aamadmivoices.blogspot.com

 

Contents:

1.       India’s Debacle Against Spin Bowling

2.       The Sad Story of BJP's Sojourn In Governance

3.       Maximum Government, Minimum Governance

India’s Debacle Against Spin Bowling

One cannot claim to be prescient considering writing that we should moderate the praise on Virat Kohli just last week, since after that India led by him went down in the Pune Test against Australia by 333 runs and that too within 3 days. The amusing part of this defeat was that the Pune track was prepared for Indian spinners and which Steve Smith had roundly criticized even before the match started stating that it was an under-prepared pitch. Where the Australians in both innings set up respectable scores above 250 runs, India succumbed in both innings to the Aussie spin twins of Nathan Lyon & O’Keefe for just about a 100 runs. What a fall there was, my countrymen! The inability to handle spin is rather strange for Indian batsmen since we are apart from having the best spinners in the game were reputed also to have batsmen who play spin the best. This premise has actually been shattered by the scoreline of the Pune Test which also takes you back to the 60’s when the Aussies would visit India with their pace attack of Alan Davidson, Graham McKenzie and Ian Meckiff which would run through the Indian top order like a hot knife through butter with the famed leg-spinner Richie Benaud would not be able to do much. But now the situation is the reverse with Indian batsmen able to stand up to the pace of the Aussie fast bowlers maybe because of the protective gear that they wear these days but completely at sea to the Aussie spinners. It is not only with Aussie spinners. But lately any spinner who comes to India be it Joe Root from England or the rookie spinner that South Africa had prior to Tahrir, our batsmen tie themselves up in knots while playing them. Not only does India do badly against them but they go back with their reputations greatly enhanced having bearded the Indian lion in its own den. This is a complete contrast to the past and logically should not have happened considering that we still have the best spinners in the world with Ashwin, Jadeja and Mishra. A time to introspect therefore for the Indian cricketing community to assess whether it is a matter of technique or temperament considering that most of the players particularly batsmen in the Test team also play in the ODI’s and the T20’s where rash shots are part of the game since as long as you get runs and do not get out, it is par for the game.

The Sad Story of BJP's Sojourn In Governance

The BJP in 2014 came to power with great expectations of providing a governance that was different from the Congress regime which more or less had a stranglehold on power since Independence. But its performance in close to 3 years now has been fraught with indecisiveness, an inability of tackling the economy and putting it on the path of high growth, a tendency to get caught up in infructious debate on social issues, controversies in education and not being able to combat the disenchantment in youth and to provide them jobs.

The BJP sooner it started in government opened its innings on the secularism issue and for lack of a desire or inability to look at the other picture was branded logically as 'intolerant'. The debate and controversies on this matter that captured the public mind for months was without substance on the part of the incumbent government and a broader mind would have doused the issues that arose quickly since they were no longer relevant and were giving a bad public image. Linked to this was the beef eating issue where again it was important to recognise that diet is a matter of personal choice and has nothing to do with religion unless you deliberately intend to put those labels. Many died because of the intolerance towards this meat eating practice since the BJP leadership failed to lay down the line and their lower echelons presumed silence meant approval of their activities to harass and terrorise beef eaters.

After that universities were converted to hotbeds of activism with one must say deliberate provocation by the then Education Minister whose educational qualifications were itself in doubt. Centres of learning like IIT's, major universities and IIM's were meddled with in terms of their policies and management board appointments resulting in a saffronisation of these institutions. With the lack of ability at the top, these institutions tended to lose their reputation and allowed small issues to assume dramatic and mammoth proportions. The educational campuses around the country are in ferment currently with the ABVP jockeying for dominant positions which is normal in a student environment. India has seen much worse during the Naxalite movement and later the Mandal agitation. But the difference this time has been that the faculty and the administration has been taking sides which is making the situation more complex and difficult to tackle and resolve. What is more disappointing is that senior BJP leaders are spreading the canard that terror is starting from the universities. In the present campus disturbances at Delhi, the Finance Minister, I&B Minister and the Minister of State for Home have been making public statements trying to cow down the other students unions apart from the ABVP which is sad since the principle to be followed here should have been students will be students and not give too much political weight to these matters. 

Crimes against women continue to dot the country similar in heinousness and depravity to the Nirbhaya case in Delhi. The ball in this case continues to be thrown between the Centre and the States considering that law and order is a State subject. But in the meanwhile the rape statistics of the country keeps escalating with the victims ranging from 6 months to 70 years and the offenders from 12 years to 70 years. We cannot continue to blame the image of women in India which depicts them as completely dependent on men and therefore they are considered as objects for the satisfaction of men. There should have been concerted efforts to change the mindset of men, to stop the objectification of our women in cinema and TV, provide facilities to assist women in danger and to dramatically speeden and enhance the punishment of rapists. Nothing like this is being done and even the Nirbhaya fund set up is seen to have spent practically no money allotted to it.

Consider foreign policy now where today we must be having the worst relations with our neighbours in the past 50 years or more. Forget Pakistan and China with whom our relations have always been antagonistic, we have not been able to maintain relations with Nepal, a country that has more reasons to be indebted to us than any  other. After the blockade for which the Nepalese government blamed India relations with that country have plummeted to lows not seen earlier. It is not all India's fault but then an effort could have been made to be more equable in the relationship. What has happened as a consequence is that China has taken advantage of the situation and come in posing as a saviour of Nepal. China on its march to reach the blue seas and thereby seek to control the Indian Ocean has made inroads into Bangladesh  and Sri Lanka at the cost of India. Arming Pakistan and developing the port in the Indian Ocean there along with ports in Maldives and Bangladesh, the Chinese strategy rather than the string of pearls that it is promoting its ports in these seas is nothing but to encircle India. Instead of combating this devious strategy of China we continue to play tweedledee-tweedledum with them and be obsessed with border demarcations and the dams that country is building on the upper reaches of the river Brahmaputra. The day the carpet is pulled out from under India will we realise that we have been nicely had by China. With the rest of the world we claim relations are on a high like the US, UK and Europe. With Donald Trump becoming President his stand on India needs to be carefully assessed since maybe he himself does not know where he stands on the issue. With his comments on America for Americans and insistence that American jobs should go to American people it may be that the day is not far off when more than 300,000 Indians in the US may be heading for home. If that happens it may help us to become the No.1 software power in the world! Relations with the U.K. are on a similar basis like that with the US since with Brexit when they themselves do not know what will happen to their country, what kind of relations can they assure us? Europe has always not been great with India except when there is a need to buttress their trade which is a tenet that they strictly follow. Dealing thus with their own problems within the EC they may not have much time for India. The position on Russia is no different since with internal change dominating the country it will keep relations with India on an even keel maintaining them for the sake of tradition but nothing more. Other than nation to nation relations the other thing that is bugging India in the arena of foreign relations is the admission to the NSG. This will not happen unless India agrees to sign the NPT. There is no logic for the NSG member countries to give membership to India on the promise of using nuclear energy for peaceful purposes and quoting its track record in that area. For the NSG countries this does not hold water since knowing the fact that India possesses the nuclear bomb, there is no guarantee that a new government may not authorise its use. Promises on these matters do not help. Therefore harping on NSG membership without signing the NPT is a big no-no for the NSG members led by China. Further one has to note that the basis of seeking NSG membership being to move ahead with the civil nuclear program to generate electricity, we have to recognise that the US which has been wanting to sell the new nuclear reactors to India be it of GE or Westinghouse or in tie-up with Toshiba are themselves not wanting to install the same reactors in their own country for fear of safety issues and the public opposition after the accidents at Three Mile Island and other locations in the US. If we buy these reactors we will again be made the guinea pigs of the experiments of the developed world. Thus you see the foreign policy arena for India is like a minefield fraught with many dangers which Sushma Swaraj as Foreign Minister, if she was fully fit, would have been able to handle but with her ailing now, it will lead to many gaps in our relations with countries around the world. She can also do without the theatrics of Narendra Modi in foreign relations and which country he can drop in to have tea with its Prime Minister, he should check with her first and not create the embarrassment we have had with Pakistan where relations have been put back by a decade because of the antics of Narendra Modi. 

The problem with the BJP in summary has been that it suffers from a lack of depth of leaders who have the capability and also command a public reputation and presence. We have seen this in the appointment of ministers where there are many in the present Council of Ministers who are not competent to hold their positions. Narendra Modi realised this when he made changes in a cabinet reshuffle in the recent past. After the upcoming election results in the Ides of March it is expected that there would be another juggling of the cabinet depending on the results to either consolidate the gains or winnow some of the deadwood in the Cabinet.

In terms of posturing for three years now the BJP continues to be in election mode with the emphasis being to win over most of the States which would get them a more equitable position in the Rajya Sabha where presently they are not able to pass any Bill because they do not have the strength of MP's which is currently held by the Opposition. Thus any bill that the BJP wants to pass flounders in the Rajya Sabha and thus cannot become law. That is the reason why the BJP prefers the Ordinance route for most legislation including the famous demonetisation exercise. In contrast Barrack Obama for the majority of his two terms as President did not have the control of both Senate and the House of Representatives and whether it was his Healthcare bill or any other it would get serious opposition and in fact most of the Bills would not get passed into law. In spite of that when it was time for Obama to step down he was considered one of the best presidents that the US had ever had considering the achievements during his two terms. In a similar vein Narendra Modi or the BJP throughout these three years or so have not seriously reached out to the Opposition and tried to work with them to pass legislation. Most of the time has been spent in bickering and stupid name-calling which one must admit is not restricted to the BJP alone but to almost all parties which has brought down the name of Indian Parliament and its proceedings have degenerated to the noise that one sees in the fish market or to elevate them a bit to the share markets of yore. Sometimes one thinks that the BJP has missed the point that they have a responsibility to govern the country and not play point-counterpoint games with the Opposition parties mostly the Congress who happen to have some 40 odd MP's only in the Lok Sabha! 

In conclusion it is sad to say that for the BJP to rule the country in a satisfactory manner it will take another decade or more during which time it has to seriously concentrate in developing a cadre of capable leaders who command respect and not have to throw their weight around to get themselves to be heard. 

Maximum Government, Minimum Governance

When Narendra Modi came to power in 2014 on the back of a resounding majority for the BJP in Parliament he had promised minimum government and maximum governance. But if you look at the situation since that time and particularly after 8th Nov 2016 you will find quite the opposite. We will deal with the situation that has arisen post-demonetisation. 

First the government defacto took over the RBI, an autonomous institution, after withdrawing 87% of the currency notes in circulation of the Rs 500 & 1000 denomination on 8th Nov 2016 and ran it until the middle of Dec 2016 when finally the Governor, Urjit Patel found his voice to reiterate that RBI was still functioning and whole. Subsequently the RBI made a record of sorts by issuing 56 circulars in 50 days. This was construed as bad management but then the RBI and government response to that accusation was that such micro-management was required to show that they were 'sensitive' to people's needs. However, the confusion such sensitivity caused the common citizens has been experienced by one and all and needs no elaboration.

Clarity in monetary policy is important for both individuals as well as business entities. Changing regulations and the paucity of cash resulted in an indirect control of the spending of both individuals which clearly was an encroachment on the fundamental rights of citizens as enshrined in the Constitution and for business entities, some of which have had to close down unable to handle the lack of cash to pay workers and suppliers. 

Compounding this was the puzzling position that the Income Tax Dept. was taking from time to time. In the initial days after 8th Nov 2016 the common knowledge with people was that if you deposited Rs. 50,000 or more into your bank account then the eyes of the IT Dept. would be upon you. This was consistent with the earlier rule that beyond this limit you needed to declare your PAN No. As days went by it was said that if you deposit more than Rs. 2 Lakhs not your account then the IT guys would be behind your back. In a few weeks thereafter the limit was changed to Rs. 2.5 Lakhs. It was also not clarified whether only those depositing such amounts at one time would attract the IT attention or was this figure the aggregate amount of deposits over the period 10th Nov - 31st Dec 2016 by any entity.
Here again the lack of clarity led to the creation of uncertainty and the sowing of the fear bogie among common citizens. 

Parallely you had ads in the newspapers and over the radio and TV that you need to declare your unaccounted income under one scheme or another to avoid further penalties and possible imprisonment. In the interim we had ads also asking people to tell on their neighbours who they believed were not paying IT which even Narendra Modi exhorted people to do in his speeches. It was also being hunted that it was patriotic to tell tales against others. This was clearly putting people against each other and the tendency of looking suspiciously at or avoiding your friend or neighbour if you were spotted making a hi-value purchase became common. There had been such a scheme earlier with the IT Dept. But the difference now was that it was being given wide publicity and you were being told if was your 'national duty'. THe government was engendering the feeling of mistrust among people where it should have been promoting unity in diversity.

Then sooner the New Year had dawned we were told that the IT Dept. was sending email and SMS notices to some 18 Lakh entities and people were encouraged to respond to these notices otherwise........... Here again there was a confusion whether the notices were being sent to those depositing Rs. 2 Lakhs or Rs. 2.5 Lakhs, though finally the IT Dept. seems to have settled down to the latter figure. To maybe show the great efficacy with which the IT Dept. was functioning newspaper headlines announced that actually 1 crore entities were under the IT scanner as if 18 Lakhs had not whetted their appetite. Thus a scare syndrome was being generated. But at the same time from election pulpits Narendra Modi roared that honest people had nothing to worry. So was the PM hinting that there were a clear 1 crore dishonest people apart from the Vijay Mallyas and all those responsible for the lakhs of crores of NPA's at our banks. If honest people were not to worry, why were 75 year old people who were not liable to pay income tax for the last 10 years getting notices? Why were IT notices being slapped on elderly women vegetable vendors in Panjim market? You can only imagine the trauma and distress on the part of senior citizens and illiterate women to explain to the IT Dept. that they had done nothing wrong. Was the data mining bot with the IT guys running completely haywire?

Arun Jaitley had avowed that the government wants to expand the tax payers base which in India is abysmally low compared to developed countries. In one of his comments he had cited the example of how the number of cars sold in 2015 in the country were higher than the number of taxpayers. Such comments lack maturity since cars are available in installment payments and the income of a family unit to which a car still belongs may have multiple wage earners out of which just one of two may be liable for tax while they may own two or more cars. Other than that as cited earlier if the IT Dept. Is going after the 1 crore entities, has it verified how many of these are already in the tax net and harassing them unduly may have the contra effect of them jumping to the other side of the fence. Thus should not the data mining bot have been fine tuned to sort out those depositors from the 1 crore entities who are not in the tax net and go after them in the initial instance if the intention was to widen the tax payer base. It is anticipated that the task before the IT Dept. being monumental this whole exercise will end up being counter productive and will rub people the wrong way. Expanding the tax base should have been done diligently, systematically and over a period of time rather than as an offshoot of the large deposits come in post-demonetisation. 

This apart there is licence and inspector raj everywhere around you be it in business, centres of learning  and every sphere of social activity. The latest being curbs on spending at weddings as proposed which is wrong.  Since who is the government to tell the people how much they should spend on their children's  wedding? Is it not the prerogative of the parents to do that? Everyone according to their means and spending ability should be the principle.

Thus nowadays if you speak or raise a voice in protest against any government policy or measure, you will first find the IT behind you and then it will be the ED or FEMA as appropriate to silence you. This what the country has come to - Maximum Government, Minimum Governance. 

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VOX POPULI

by

S Kamat

as

Aam Admi

Issue: 189           Date:  20.02.2017

skamatblog.blogspot.com or aamadmivoices.blogspot.com

 

Contents:

1.      Moderate The Praise For Virat Kohli

2.      The Demonetisation Bungle Unravelled

3.      Demonetisation Impact On The Economy & The Malaise of Contradictory Figures

Moderate The Praise For Virat Kohli

The media is again going ga-ga on the exploits of Vrat Kohli on the cricket field as also covering his personal life that is linked to the actress Anushka Sharma. There is no doubt that Virat has been exceptional lately in his batting and also as captain in all 3 formats of the game. If he continues with the present form for some years and given his relatively young age he should hold all the records relating to batting in cricket beating the likes of Sunil Gavaskar and Sachin Tendulkar. His only competitor here is Alastair Cook from England who has lately relinquished his captaincy ostensibly to concentrate on his batting. Virat at the same time has kept a cool and balanced head both on and off the field which is a rare virtue for a sportsman particularly one so young. We should nurture such talent and nourish it to its full potential. Therefore undue praise tending towards hyperbole should be avoided lest Virat’s young age turns against him and makes him lose his head. In the event of that happening it will be only India’s loss. With our sportsmen particularly in the high voltage arena of cricket we have been quick to praise and with a minor slip in form, we have been equally quick to castigate. Thus the media and all those involved in cricket should tread with caution while commenting about Virat’s exploits and show the same balanced judgment as he is showing rather than pursue TRP or the ABC ratings which are media indicators for ‘excellence’.

The Demonetisation Bungle Unravelled

There have been many opinions that have been expressed as to why Narendra Modi embarked upon demonetising the old Rs. 1000 and the Rs. 500 note on the 8th Nov 2016 while simultaneously launching the new notes of Rs. 2000 and Rs. 500. The simple answer to this most asked question over the last three months in India was that he wanted to bring the black money syndicate closer to him and make them sever their links with the other political parties. For this he left a small window of opportunity for the black money syndicate to exchange their money to the new currency notes making them much obliged. The reason why Modi did this was to ensure that funds keep flowing to the BJP. The other reason was that if the black money syndicate is obliged to Narendra Modi then they may drop their plans for eliminating him as he had claimed in an emotional speech made just about a week after 8th Nov 2016 in Goa. This is but natural survival strategy of any individual to save his own life! 

The second most important reason of demonetisation was to starve the other political parties of cash resources before the Assembly elections that are currently ongoing in UP and just completed in Punjab, Goa and Uttarakhand. BJP having had the first information advantage about demonetisation had moved their cash resources to gold and other easily negotiable  modes of money. The results of these elections in the middle of March 2017 is being considered a referendum on Modi's policies including demonetisation and its consequent ravages on civil society.

The demonetisation exercise was sold by Modi to the country on the platform of wiping out black money, to fight corruption, to erase the resources of terror and drug funding, to fight counterfeiting etc. etc. Let us look at each of these and see how effective the demonetisation exercise has been to combat these menaces to our civilised society. 

As for black money as highlighted above the facility of exchanging the old notes to the new currency notes mostly the Rs. 2000 denomination was assisted by this government with its sloppy implementation. Proof of this is the numerous seizures of cash hoards across he country mostly in new currency and that too in the Rs. 2000 note. Just recently in a godown in Bengaluru  Rs. 4 crores odd currency was found stashed in sacks of potatoes and onions which comprised more than 90% of the Rs. 2000 notes and the remaining were new Rs. 500 notes. For more than a week now no one has come to claim the cash which leads to the logical conclusion that this is black money. The Rs.2000 note has become the note of choice for black money hoarders now since for the average public it has no meaning since you can never get change for it while daily shopping. With news that the government is coming out with a new Rs. 1000 note the black money syndicate is quaking in its shoes whether the Rs. 2000 note would be demonetised without giving them adequate notice. 

Nothing has changed as far as corruption goes since it continues to thrive as we have seen in raids across the country where mostly new currency has been seized. The assumption that with less cash in the economy the quantum of corruption will reduce is another one of those daydreams that Modi has exclusive access to experience. It will take decades for this kind of logic to work in India since if there is less cash then corruption will shift to kind like jewellery, gold etc. 

For terror and drug funding it was a temporary setback and now they are comfortable with moving to the Rs. 2000 note and the other denominations. Nothing has changed in these areas irrespective of whatever fudged statistics that the government puts out. As for counterfeiting it was again a matter of time that the new notes would have been copied and the latest is that the Rs. 2000 note coming out of Pakistan is as good as the original, if not better since our experts are studying more the the Pak origin note than in concentrating to make our note copy-proof! 

How was all this demonetisation exercise sold to the people? As something benefiting the poor. How it does that no one knows as yet though close to 3 months have passed since 8th Nov 2016. However, one must say with certainty in the days post-demonetisation the poor were badly hit with daily wage labour thrown out of jobs, no money available for food making  a mockery of Modi's statement that the rich are spending sleepless nights while the poor are sleeping comfortably. The cash shortage thereafter resulted in unending queues in front of banks which physical trauma and anxiety led to many deaths. Additionally there were deaths linked to non-availability of cash and non-acceptance of the old notes by doctors and at hospitals that led to more deaths. Thus  125-130 lives were lost across the country. The central government has been strangely silent on this issue. No compensation has been announced for them except that Akhilesh Yadav in UP made a pre-election gesture of offering a nominal amount of money to them. Thus one cannot but come to the conclusion that Modi is bothered about his life as mentioned earlier but not about the lives that were lost because of his actions. This is being rather insensitive and callous, a trait of character that Narendra Modi should try and eliminate.

In the euphoria immediately after demonetisation when it was expected that out of the 87% of the currency then in circulation of the Rs. 1000 and the Rs. 500 notes  would not all come back to the banks, it was rumoured that every Jan Dhan account would be credited with Rs. 25,000. But it was found that the black money syndicate and/or the Jan Dhan account holders were smarter and a large number of these accounts were found to have crores of deposits already made in them. Being outmaneuvered Narendra Modi made a rather lame duck speech on New Year's Eve posting minor sops to various classes of ctizens which many have said sounded like a Budget speech. It was also found that majority of the demonetised notes to the extent of 93% in some estimates have come back to the Banks. The wind was thus taken out of Modi's sails once again since the expected windfall dividend by the RBI to the government based on which the initiatives of funding the poor was to be taken had vanished. The latest is that Urjit Patel, Governor of the Reserve Bank in the manner of the King Was In His Counting House Counting All His Money, will do this for another 6 months  given the present capability of the counting machines with the RBI. By the time they come out with the information the public would no longer be interested and the matter would have died its own death. The latest on funding the poor by the government is that without putting in Rs. 25,000 into every Jan Dhan account they are planning to put this money into each BPL account with the banks. Whether the Jan Dhan and the BPL account is the same is not known given the double-speak and obfuscation that everyone speaking for the government indulges in these days. Thus nothing may happen as far as the transfer of the Rs. 25,000 to each BPL account is concerned. So much for doing things for the poor as Narendra Modi has claimed. The other concern whether it is this Rs. 25,000 transfer or the current talk of the UBI (Universal Basic Income) quantum of the latter yet to be specified, it should not be that the money is transferred under whatever pretext to their own cadres to fill up the BJP pockets be it individual or party coffers.

Another thing that happened post-demonetisation was with the shortage of the new Rs. 500 note and queues unending at bank counters there was a necessity for the government led by Narendra Modi to change the narrative. The spin on the 'cashless' economy commenced as the latest saviour of the 'poor' man. This proposition had inherent flaws since no economy can be essentially cashless and the poor man definition extended to all people and not necessarily those who are not monetarily well off. The intention was to divert the attention of the people from the trauma and difficulties of accessing their own cash at the banks. For this the government announced incentives for using debit and credit cards which has financial implications for the card issuing agencies like banks and vendors notably petrol pumps apart from the crores budgeted for a bonanza to the consumers and the trading community for supporting cashless transactions. This apart because of the cash shortage the government exempted parking fees and toll charges across the country resulting in a loss of revenue for NHAI - National Highway Authority of India, alone on tolls amounting to more than Rs. 900 crores, for which it has asked the government to reimburse them. Who's going to pay for these thousands of crores that the government is doling out? Why was this done in the first place? The reason is the classic case of - Act in Haste and Repent At Leisure. The government acted in haste on the demonetisation measure and is silently getting the aam admi to pay for their blunder while implementing it. All this money is just being committed irresponsibly to shore up the credibility of the BJP. Was that the reason the people of the country had handed over the reins of power to the BJP in 2014? It is not just the BJP but all political parties when voted to power conveniently forget their high sounding rhetoric and degenerate into a morass of unaccountability in financial matters. The latest to sink into this dirty swamp is the Aam Admi Party which is planning to change its name as learnt from reliable sources since it is no longer aam admi or for that matter represents that community. This is the sad story of Narendra Modi who refused to accept responsibility for his blunders in implementing the demonetisation exercise and ride to bluff his way out of the predicament. And in that process committed the country's financial resources to profligate initiatives and t measures that are much ahead of time for the country like the cashless economy.

Demonetisation is a good and effective measure if done properly. It tackles black money and  inflation in conjunction with other economic measures. However, in isolation as far as black money is concerned it can impact just about 10% of the black money since that is the amount estimated that hoarders hold  in cash. Over a longer term a less-cash economy is also beneficial in combating  inflation and legitimising economy activity since it is assumed that the black money or shadow economy will progressively move to the white economy. But for moving to such stages needs time, patience, ability and skill to ensure that the existing economic activity is not unduly affected. For doing the public a future good politicians like Narendra Modi should not sacrifice the present good as was evident since 8th Nov 2016.

Demonetisation Impact On The Economy & The Malaise of Contradictory Figures

With China reported to be massaging its economic indices to show positive trends in its growth story, India seems to be following suit. With the Economic Survey presented in Parliament before the Union Budget positioning a dip in growth with the GDP likely to show an increase of only 6.5%, the CSO (Central Statistical Organisation) a couple of days later has said that the growth would be 7.1%. The attempt seems to be to show that demonetisation has not affected the economy. But this is contradictory in the face of reality where every sector of the economy has got hit including the hi-tech Apple which for their IPhones has seen a drop in sales by over 30% post-demonetisation. Narendra Modi on this matter made a rather immature comment in Parliament recently saying that the Indian economy was strong and therefore could withstand demonetisation. This clearly implies that there has been an impact of demonetisation on the economy. It also signals a change in stand of this government which was in denial all this while that the economy has not taken a hit post-demonetisation and the cash shortage after that. Another aspect of this was the timing of the demonetisation which was at a time when the Indian economy could least handle it. After a sluggish year or more the economy was just picking up when it was hit by the double whammy of demonetisation  and cash shortage. The result has been like when you are climbing a hill and then you are pushed back which makes it all the more difficult to climb again even with double the effort. Estimates are that the demonetisation and the untimely emphasis of moving to a cashless economy has put back the country by over a decade. This is reflected in the recent IIP figures showing a slower growth with capital goods remaining sluggish and consumer durables having taken a major hit of more than 25%. Recently the CPI figures were released showing the prices in the marketplace on a downward trend which one must say is not reflected when you go out to buy anything. But then a few days later the WPI has shown a substantial surge! How in the same economy the CPI & the WPI can be at variance is what our CSO should elaborate?  At most the indices should track each other with a marginal differential which could be because of a lag in reporting or whatever. The government thus has to seriously get down to brass tacks and examine the figures they put out since a serious credibility gap is building up. Arun Jaitley, Finance Minister in his overzealous attempt to defend the demonetisation and the initiative towards a cashless economy has been selective in quoting figures and is thus suffering from the malaise of the old adage that a hundred lies are required to hide a simple truth.

Sometimes it is said that the people get a government that they deserve. The Union Budget this year was in the majority just an announcement of sops in direct taxes which essentially was buying out the people at large and making them complacent so that they do not complain about the drastic effect that demonetisation had on their lives. The fact that the direct tax reductions were a pittance compared to loss in livelihood and business losses that demonetisation brought is what the people will realise, though they have no choice in the matter and cannot do anything about it. The Budget was also getting the people ready for the GST regime which will lead to a spurt in inflation and to soften that blow by giving them the concessions in taxes. In this matter the people have been well and truly fooled but as said earlier it is a fait accompli for them. Thus when people are bought over, we call them corrupt which is true for the whole of India and no wonder we get a corrupt and inept government time after time after time.

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VOX POPULI

by

S Kamat

as

Aam Admi

Issue: 188            Date:  13.02.2017

skamatblog.blogspot.com or aamadmivoices.blogspot.com

 

Contents:

1.      Narayanmurthy's Pet Pieve?

2.      Shutting Down Liquor Outlets 500 Meters Near Highways

3.      Narendra Modi Yet Again Barking Up The Wrong Tree

Narayanmurthy's Pet Pieve?

The upcoming spat between Narayanmurthy and the other original promoters of Infosys since not associated with the Co. is throwing up shades of the Ratan Tata - Mistry spat in the Tata group. The idea seems to be that if Ratan Tata got his way why should we not try the same at Infosys with Narayanmurthy leading the pack against the present CEO, Sikka and Charman, Seshashayee. This is again the classic case of backseat driving with the original founders wishing that they had the steering wheel in their hands still though their public statements would be exactly the opposite. Narayanmurthy  and his fellow brethren in this initiative should understand that they have handed over the Co. to professionals and there can be no scope to now sit on the sidelines and carp about the fine details, clothing themselves with holy statements about shareholder value and corporate responsibility. Taking potshots again at one or the other individual managing Infosys now and orchestrating comments from likely new appointees to replace the targeted individuals is showing a complete lack of responsibility and rank bad practice of management however noble the objectives of the founders may sound. There is another issue here that the Tata group is an almost a century and half old and has the track record of that period to support them and thus obtain public and/or shareholder support while in comparison Infosys has had a much smaller span of time to cultivate the same image and therefore may not be able to garner much public or shareholder backing in Narayanmurthy's present pieve. There is no doubt that Infosys has been an achiever in the Indian IT sector and has been commended for the values it upholds in terms of corporate governance and generating shareholder value. But then one must go back to the early 1980's when Indian IT was in its infancy and Cos. like Infosys who started with hardware manufacturing also struggled with prevailing conditions of rules, regulations and government bureaucracy and cut corners on following these regulations like that of excise, the income tax exemptions for the IT industry and the implementation of the STP (Software Technology Parks) policy. Also there has been a long standing comment that the amount of handholding and support that Indian IT industry got from successive governments at the Centre through the 80's and until now, if it had been made available to any other sector of Indian industry they would have achieved the same level of success and fame around the world. Thus in this context the awards and other accolades that Narayanmurthy claims that Infosys has got, one can take with a pinch of salt since many awards as we know can be bought. In the same manner the interview that Narayanmurthy gave to one of the leading financial papers on this matter seems to be bought and planted with the sole objective to make the founders look sacred and paint the present management black. Narayanmurthy needs to recognise that the IT business worldwide has changed with the developing worldwide scenarios and Infosys' present management has to deal with these matters on an ongoing basis and show the promised results over a period of time. Thus to freeze frame the accusations to one or the other issue or incident and to draw alarmist conclusions from that will only boomerang on the founders who are advancing in age and it is natural that people may draw conclusions that are otherwise on the state of the minds of the founders. It is sad to see that inspite of Narayanmurthy's high sounding words he is unable to sever his links with Infosys after publicly handing it over and stoops to define what Sikka should do in having regular meetings with a dozen or more old hands of the Co. instead of doing the job that he is paid for and that is to run Infosys. 

Shutting Down Liquor Outlets 500 Meters Near Highways

Sometimes the Supreme Court in matters of common knowledge seems to be a little deficient while on aspects of jurisprudence one would give them top marks. This comment relates to the recent judgement that bars and liquor shops within 500 meters of highways should be shut down. The objective of the judgment though laudable that drunk drivers cause accidents is at variance with the facts on the ground wherein the court should have known that across India many of the highways go through small towns and even upcoming cities. This is more so in Goa where most of the population lives on the two sides of the NH17 which more or less bisects the State and you have a 'Bar & Rest' almost every 100 meters of the 120 KM NH17 traverse through the State. Where it goes through or near the big towns like Madgaon many liquor vends, bars and restaurants serving liquor that have been there for generations would get affected by the Supreme Court judgment. Thus the judges should have taken cognizance that across India not all are open highways and therefore any notice to close down these bars and liquor vends will affect the livelihood of lakhs of people. Another point to be noted here is that for a truck driver or for that matter any vehicle driver who is a habitual drinker and/or an alcoholic the 500 meters ban is not going to make any difference since they are known to drive tens of kilometers to find a liquor shop that is open at the dead of night. Therefore it is best that the Supreme Court reviews this judgment, the sooner, the better.

Narendra Modi Yet Again Barking Up The Wrong Tree

Someone must have put in Narendra Modi's ears mid-2016 that the IT Dept. officials are not putting in the proper amount of work and are in fact slackening which may be far from what the reality was. That is why he brought in the demonetisation on Nov 8th, 2016 apart from many other weighty reasons which brought the IT Dept. a huge amount of workload. Initially it was reported that the IT Dept. has sent in 18 Lakh notices to individuals and entities whose deposits post 10th Nov 2016 to 31st Dec 2016 do not match their IT returns and are in excess of Rs. 5 Lakhs. That truth on the number of cases has also changed now with the IT Dept. stating that they are pursuing 1 crore cases. This is the actual number of cases thrown up by the data analytics tools used by the IT Dept. So the IT Dept. has another 82 Lakhs cases to go. With 18 Lakh cases the IT Dept. would have been snowed under and with the 1 crore cases it is like being hit with an avalanche or a tsunami. The truth regarding the value of deposits has also changed from Rs. 2 Lakhs initially to Rs. 5 Lakhs in the middle and now finally Rs. 2.5 Lakhs.  Narendra Modi and the BJP unfortunately keeps playing with the truth. When questioned, they would claim that the latest truth is the 'better' truth. Little do they realise that there is only one truth which is infallible and non-negotiable. The average Indian is gleeful that the IT Dept. is swamped with cases. What the Indian psyche does which the IT Dept. is fully aware of is that it gambles in the good old ‘jugaad’ way that their file or case will never be picked up by the IT Dept. Until the unlikely event moment arrives of their file or case getting picked, they deal with it in an attitude of ‘dekha jayega’ or ‘we will cross that bridge when he come to it’ – hoping against hope that the bridge never comes on their horizon. The other thing is that these 1 crore cases are supposed to involve Rs. 10 Lakh crores which is rather close to the value of the demonetised currency on Nov 8^th, 2016. Thus with some conviction one can say that maybe the IT Dept. and the government is yet again barking up the wrong tree, like when all the demonetised currency came back to the banks by 31^st Dec 2016, and they will find that most of these are legitimate deposits within the existing framework of IT rules and end up blaming the data analytics tools saying that it is in cahoots with the black money mafia conniving to make fools of the IT Dept. and trying to get at Narendra Modi. 

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VOX POPULI

by

S Kamat

as

Aam Admi

Issue: 187                                         Date:  06.02.2017

skamatblog.blogspot.com or aamadmivoices.blogspot.com

 

Contents:

1.      Elections & Democracy

2.      Dog Menace & Swachh Bharat

3.      Appointing Politicians As Independent Directors In PSU's

4.      Railways Focus On Capital Costs Rather Than Increasing Employment

5.      IT Dept. Looking At Appointing Private Auditors To Assess Large Deposits Post-Demonetisation

Elections & Democracy

We are approaching elections in UP & some of the other States which will determine the future of democracy in India. Goa's D-Day for the polls was 4th Feb 2017 which passed with a record turnout of 81%. In the run-up to this day we have had our fill of promised alliances, broken commitments, unwound gathbandhans and manifestos that are being released at the last minute to avoid being closely questioned on the contents. In this atmosphere we have also the candidates some 250 in all contesting for the 40 seats release their asset declarations. There are very few among the candidates who are not crorepatis and among the incumbent bunch of MLA's almost all are crorepatis. In India the sure fire away of becoming a multi-millionaire or crorepati is to enter politics and become a MLA or MP. The results of the elections will be known in the middle of March - The Ides of March - as they are known which will portend the future of democracy in our country. 

Thus in this present context you will find it very amusing as to how and why the electorate plays dumb and gullible. It faithfully swallows all the promises made by these politicians and their parties and one would imagine based on these considerations would decide in a large part to vote for one or the other candidate. No matter that some of the promises would have been the same that they had made five years ago at the time of the last elections or that many of the promises made in the last elections have not been fulfilled yet. The generosity that the electorate shows to these politicians is many order greater than that the voter would show to his family, friends and/or business associates. Is there a connection there or a chord that is touched between the voter and the candidate that the first decides to be gracious and the second maybe deserves that graciousness, otherwise how would the connect remain durable and undying time after time and year after year. And why would more and more candidates and parties jump into the fray of elections as we have seen in Goa this year where there are more parties and candidates fighting the elections than in previous years.

Then we come to the electoral process by which we choose the candidate to represent our constituency. With many parties vying for votes, there will be at least four or more candidates in each constituency, thus at the most the winning candidate gets much less than half the votes polled. In a democracy is it not necessary for you to win by a majority of the votes polled to be a true representation of the expression of the people's will. In our elections this never happens. Like in the case of the last general elections the BJP just got 34% of the votes polled and obtained the whopping absolute majority in the Lok Sabha. Almost more than half the voters did not want the BJP to come to power! The situation in the State elections including Goa it is similar where the candidate and the party by polling just about 30% of the votes comes into power. Thus there is something wrong somewhere with our electoral process where a candidate polling a minority of the votes is declared elected just because he has got more votes than the others, which is definitely not reflective of the will of all the people. A candidate if he gets more than 50% of the eligible votes in the constituency can be considered to have been elected in a truly democratic manner. This can be done by what is called proportionate representation which method of elections is being used in some of the progressive democracies like France. Here in a series of elections which eliminates other candidates in each round, the winning candidate is declared elected only after he has polled more than 50% of the votes in the final round where he has only one opponent. In our Indian context this multiple election process would have been considered tedious and costly given the fact that we tended to use ballot papers. But in today's context where the EVM's have come to stay in our elections, the cost of the electoral process, being now electronic, is drastically reduced hence proportionate representation method of elections can be considered feasible to be held in India. However, the existing political parties in the principle of - Everyone Resists Change - will oppose this system since firstly they are unfamiliar with it and it makes their life much more difficult to ensure that they reach the mark of more than 50% of the votes polled. The other thing that we have to do in this system is to make voting compulsory, in which event true democracy would function in India.

Now let us look at the actual work involved in holding elections. We have in India the Election Commission whose charter is to conduct the elections in a free and fair manner. This body is staffed at various levels by senior people who have at one time or the other been in government service and when elections are to held in a State or constituency, the Election Commission depends on the local government to provide it additional staff and officials. Thus you will see that most officials come with a background of government service. The election times are the only time that the writ of the Election Commission and its officials down the line, is unquestioned. Everyone has to listen to them from the ministers, politicians, government agencies and local bodies. It is like a limited duration dictatorship that is imposed in each State that is going to the polls. There is no doubt that the Election Commission and its officials enjoy this power and revel in it. So you have the implementation of a democracy through a limited duration dictatorship. And in the instructions issued by the Election Commission you see the tinges of these tendencies like remove banners, cover hoardings, do not talk like this, such statements are not acceptable and then indulging in incongruous things like going to the extent of having processions in the streets to educate voters and to woo first time voters with gifts! The Election Code of Conduct is also another thing enforced jealously by the Election Commission which sometimes is a serious impediment to development work and normal functioning of the government when it is in force. Such kind of strictures have replaced the earlier fun time that people had during elections akin to a fair or a fiesta with buntings, banners, loudspeakers blaring songs and people getting gifts apart from the 'usual' cash. All this was stopped by T N Seshan, one of the past Chief Election Commissioners, who took out the fun part of elections and sanitised them to the present way of holding elections. To a certain extent he was right since street side walls tended to get defaced with graffiti of political parties which would not get removed once elections were over leading to a surreal environment where the expectations of imminent next elections would sustain. The elections convey today an appearance of serious business but the Election Commission gets taken away sometimes like conducting flag marches in some parts of Goa with paramilitary forces just before elections which one would feel is completely unnecessary. Similar situations would persist in other parts of the country during election times maybe with minor variations. Thus you have a jealous body like the Election Commission overseeing elections with a dictatorial manner to bring in democracy.

Then you have our democratic leaders actively seeking Z security around them to protect themselves from citizens. When sessions of the Assembly or Parliament are held it is mostly behind multiple barricades and with Sec 144 imposed in the surroundings which is ostensibly to 'protect' these institutions and the legislators from the citizens who elected them in the first place. Such is the conduct of democracy in our country. Even if one or the other party is elected, it is the same corruption, it is the same vacuous policies we hear of, it is the same emphasis of 'development' which fills their pockets, it is the same denuding and destruction of the environment around us, then why do this tamasha of democracy when there was no intention of ever putting it properly into force.

Dog Menace & Swachh Bharat

Just last week an actress was mauled by dogs in the heart of Goregaon, Mumbai. This incident follows similar attacks by canines in Bengaluru where small children were pounced upon and grievously hurt and in Kerala where elders were attacked and killed by dogs. These mongrels are seen in the vicinity of garbage dumps which have become synonymous with India particularly in urban areas. Thus if you want a Swachh Bharat the first thing to do is to get rid of garbage and then remove dogs from near these dumps. This will not only get you clean surroundings but rid yourself of the menace of stray dogs. Again stray dogs are one of the major polluters of our streets and surroundings with their poop (excreta) dotting the surfaces all over. Unless we tackle the stray dog issue we will never have a Swachh Bharat. 

Appointing Politicians As Independent Directors In PSU's

The BJP government has been appointing their party politicians to the boards of PSU's as independent directors including the engineering companies. This is going against the grain of appointing such directors who were supposed to bring in expertise apart from sharing their experience with the company's top management to better run these enterprises. There is obviously no technical and management expertise that these politicians can bring to these PSU's. The loaves of office syndrome in which the ruling party unable to accommodate these politicians in ministerial and other positions is placing them in PSU Cos. so that they can claim perquisites and benefits is at play here. It is time that such practices are stopped since majority of the PSU's have already been run to the ground and the BJP will ensure that the few performing PSU's meet the same fate.

Railways Focus On Capital Costs Rather Than Increasing Employment

 It is understood that the Railways are planning to build walls to segregate the tracks between Mumbai and Delhi. Projects like these are what precisely show the vacuousness in the planning process of the present government. It is presumed that the walls are being built around the tracks to isolate them from man and animal intrusion considering that on this trunk route fast trains are likely to be introduced. With so much manpower in India and with the majority of them being unemployed, this would be the ideal job of some of these jobs be given to them as line inspectors to conduct surveillance of the tracks. But instead of that the Railways are building walls which will cost a lot of money which means kickbacks to the powers-that-be and though these projects will provide jobs, it will be much less than the line inspectors as proposed above. Even the high level committee appointed after the Kanpur derailment last December has blamed the Railway employees for many of the accidents and has recommended automation to avoid the lax working of the staff. This approach screams of an avoidance syndrome wherein instead of tackling man-management issues and improving working methods, effectiveness and productivity of employees we emphasise on automation in our attempt to disregard them. The West goes in for automation because they have less manpower and therefore tout the reliability of these systems. In the same way should we not have shown the world our management skills in handling people considering that we have a huge manpower pool. The shining example of excellence and innovation we have in these matters are the Dabbawalas of Mumbai who have shown to the world their ability to deliver correctly and on time tiffin boxes over an extensive geographical area. These Dabbawalas continue to strive to improve their services and that is the reason why many of the management schools in India and abroad use their work as case studies. Unfortunately this example has not permeated into the Railways and for that matter in other spheres of activity in India where taking the easy way out and finding ways to fill one's pockets is becoming increasingly the hallmark of the Indian way of life.

IT Dept. Looking At Appointing Private Auditors To Assess Large Deposits Post-Demonetisation

It was reported in the newspapers that the IT Dept. is looking at appointing private auditors to assess large deposits at the banks post-demonetisation which number of cases is now positioned at 18 lakh. With this the government seems to have finally woken up to the reality of the enormity of the task before them to track the massive deposits that have come into the banks after demonetisation. In the normal course if all the cases were to be taken up by the ITDept. it would have needed a new generation of officers to be born to finish these since the present bunch of IT officials would have long since retired until the last case was assessed. However, there is a matter of legality here whether the IT Dept. can appoint private agencies for this task since there is an aspect of confidentiality. Whatever information is submitted to the tax authorities is assumed to be kept confidential between the authority and the individual or at least that is the present belief. Is a private entity legally entitled to handle this information? To put it in plain and simple terms, we are in India and any such information getting into the wrong hands will open individuals to harassment and even blackmail. This matter therefore needs to be verified before any step is taken to appoint such entities by the IT Dept.  Postscript: The actual number of cases thrown up by the data analytics used by the IT Dept. is 1 crore cases who between 10^th Nov & 31^st Dec 2016 have deposited more than Rs. 5 lakhs in their accounts and which is at variance with their IT returns. From these the IT Dept. has sent sms & email notices to just 18 Lakh which means another 82 Lakhs to go. What the Indian psyche does which the IT Dept. is fully aware of is that it gambles in the good old ‘jugaad’ way that their file will never be picked up by the IT Dept. and more so in the present context of a huge number of cases. In the unlikely event their file or case gets picked then they will deal with it in an attitude of ‘dekha jayega’ or ‘we will cross that bridge when he come to it’ – hoping against hope that the bridge never comes on their horizon. These 1 crore cases are supposed to involve Rs. 10 Lakh crores which is rather close to the value of the demonetised currency on Nov 8^th, 2016. Thus with some conviction one can say that maybe the IT Dept is barking up the wrong tree again, like when all the demonetised currency came back to the banks by 31^st Dec 2016, and they will find that most of these are legitimate deposits within the existing framework of IT rules and end up blaming the data analytics tools saying that is cahoots with the black money mafia conniving to make fools of the IT Dept.

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